Prime Minister Anthony Albanese and his government are under fire from businesses over changes to capital gains tax. Photo: Michelle Kroll.
Labor is facing a fierce backlash over the Federal Budget’s measures to change capital gains tax as it relates to business.
From July next year, the Federal Government will replace the 50 per cent CGT discount with an inflation-based discount, with all net capital gains to incur a 30 per cent minimum tax.
Analysis suggests that would translate to tax rates of up to 47 per cent for business founders and investors.
Some entrepreneur millennials immediately pushed back, mocking Anthony Albanese with AI-generated memes suggesting the Prime Minister is now a 47 per cent silent shareholder in their enterprises.
One retailer posted a meme on social media saying the PM “has never done a stocktake and somehow still gets 47 per cent of the business and takes zero risk”.
The Prime Minister took that in good humour, even complimenting the young business owners for making him look good in the fake ads.
But the backlash has since ramped up to another level, with business owners labelling the planned tax changes as an “aspiration ambush” that will deter start-ups and adversely impact growing enterprises.
An open letter signed by 40 business owners has severely criticised the planned CGT changes and has called on the PM to give it all a rethink.
“Rather than back us, you have ambushed us with a massive tax increase, a tax that will hit us, the Australians we hire, and the investors who believe in us, the hardest,” the letter states.
“The consequence isn’t a budget that helps young people get ahead; it’s a budget that will ensure that young business builders, people like us, are much more likely to get left behind.”
The Federal Budget’s changes to CGT and negative gearing on investment houses have been more favourably received than the changes set to impact small businesses, trusts and shares.
Mr Albanese and his senior ministers are separately crossing and fronting numerous media events to sell the new budget measures, but are finding little love from the small business sector.
The Prime Minister said the campaigns against the tax changes were not based on facts.
He said the inflation-adjusted CGT discount and minimum of 30 per cent new tax on real gains was only realised when a business was sold and an asset realised.
“It’s not an ongoing annual year thing or anything else and most small businesses pay little or no capital gains tax when they sell,” the PM said.
“There are campaigns being run from the right-wing parties and their allies to distort some of what’s being offered.
“We’ll talk that through and that’s why we are taking every opportunity to explain what the changes are.”
Meanwhile, the Opposition is unveiling an alternative plan the Coalition says will back small businesses.
Shadow treasurer Tim Wilson told the National Press Club on Wednesday (20 May) the Coalition would invite self-starters to help advise it on how the economy can be re-structured to empower the small business sector.
He announced the “Stand with Small” campaign to counter the Federal Government’s new business measures.
“Where the Albanese Government has declared war on the self-starters and small businesses of this nation, we are going to fight for them,” Mr Wilson said.
“Over the past year I have been speaking with small businesses across the country and particularly about how the rules of the economy increasingly feel rigged against them.
“And I have reached a conclusion – we have an economy designed for the 20th century and I am no longer convinced tinkering at the margins will fix it. We need new economic structures for the 21st century.”
ACT independent Senator David Pocock is also among those raising concerns over Labor’s planned changes.
“The government needs to do the deep consultation required to get this policy right so any changes don’t drive investment offshore,” Senator Pocock said.
“We need to retain maximum sovereign innovative capability and retain economic benefit here in Australia.”
Original Article published by Chris Johnson on Region Canberra.
